New York Attorney General Letitia James announced a $1 billion settlement with Yellowstone Capital for exploiting small businesses through fraudulent, high-interest loans disguised as merchant cash advances. The agreement cancels $534 million in outstanding debts and provides $16 million in restitution to affected businesses, benefiting over 1,100 in New York and 18,000 nationwide.
The scheme imposed daily repayments and interest rates up to 820%, forcing some businesses, like Manhattan’s City Bakery, to close. Yellowstone and its officers are banned from the industry and must cease collection efforts.
The AG’s office continues to pursue legal action against associated entities and individuals, highlighting its commitment to protecting small businesses from fraud.
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